The assassination prompted threats of unprecedented reven-ge by Palestinian militants against Israel and the US.

Yassin was the most prominent Palestinian leader to be killed by Israel in more than three years of fighting and his killing was seen as a major escalation.

In a spontaneous outpouring of rage and grief, tens of thousands of Palestinians took to the streets in the West Bank and Gaza Strip.

A cloud of black smoke hung over Gaza City, as angry mourners burned tyres in protest.

"Words cannot desc-ribe the emotion of anger and hate inside our hearts," said Hamas official Ismail Haniyeh, a close associate of Yassin.

Israeli Defence Minister Shaul Mofaz, in turn, pledged that "the battle against Hamas will continue," suggesting there will be more air strikes and raids.

The US urged both sides to show restraint.

At daybreak today, Israeli helicopters fired three missiles as the wheelchair-bound Yassin, his bodyguards and dozens of others left a neighbourhood mosque in Gaza City.

Yassin and seven others were killed, including several bodyguards. Seventeen people were wounded.

"His wheelchair was twisted. Two or three people were lying next to him on the ground. One was legless," said witness Yousef Haddad.

Two more Palestinians were killed in Gaza later today, one while handling explosives and the second by Israeli army fire, during a protest against the Yassin killing, Palestinian hospital officials said.

Israel held Yassin responsible for the deaths of hundreds of people. Prime Minister Ariel Sharon, a former army general, was updated throughout the operation.

The Yassin assassination was seen as an enormous gamble by Sharon, who is trying to score a decisive victory against Hamas ahead of a possible Israeli withdrawal from Gaza, but risks triggering a dramatic escalation in bloodshed that could turn the public's mood in Israel against him.

The Palestinian Authority said in a statement that "Israel has exceeded all red lines with this cheap and dirty crime", and declared a three-day mourning period.

Fearing revenge attacks, Israel clamped a closure on the West Bank and Gaza Strip, barring all Palestinian from entering Israel. Most West Bank Palestinians were confined to their communities.

Straw condemns Israel as he seeks terror curbs

The Foreign Secretary Jack Straw was in Brussels today trying to strengthen European Union co-operation to fight against terror.

He was discussing the issue with his counterpart at a meeting of the EU's General Affairs Council.

And as he went in, he warned that the Israeli assassination of Hamas founder and spiritual leader Ahmed Yassin would do nothing to reduce terrorism.

He described the killing by a missile fired from a helicopter gun ship as he left a mosque in Gaza City in a wheelchair as unlawful, unacceptable and unjust.

Mr Straw also said he could not see how Israel could benefit from the killing of an old man in a wheelchair.

Today's meeting of EU Foreign Ministers comes in advance of a summit of political leaders, including Tony Blair, which will also be dominated by the war on terror.

They are expected to finalise plans for greater co-operation between EU police and Intelligence Services.

There are fears that Britain is top of the list for attack and security is under the spotlight at Westminster after protesters scaled Big Ben.

The EU has already decided to create an anti-terrorism czar to co-ordinate the efforts of the law and order forces across the EU.

Today's meeting was likely to produce more pledges to tighten co-ordination of national efforts while avoiding the creation of new levels of bureaucracy in response to growing public concern over terrorist attacks.

Whatever the foreign ministers decide will be passed for formal approval to a meeting of EU leaders at a summit in Brussels on Thursday.

The summit was originally called to review EU economic reforms but is now certain to be dominated by the need to fight terrorism.